We recently published a list of 10 Best Electrical Equipment Stocks to Buy Now. In this article, we are going to take a look at where Advanced Energy Industries, Inc. (NASDAQ:AEIS) stands against other best electrical equipment stocks to buy now.
The global electrical equipment market size was pegged at US$1,513.22 billion in 2024, and the market is expected to grow from US$1,660.20 billion in 2025 to US$3,326.86 billion by 2032, according to Fortune Business Insights. The expansion in IT, manufacturing, healthcare, and telecommunications continues to increase the requirement for electrical machinery and equipment. Furthermore, increased trade and globalization result in an exchange of electric equipment, leading to enhanced market access and higher sales. Also, urbanization increases demand for electrical appliances in residential, industrial, and commercial applications.
The broader US electric equipment industry continues to play an important role in both the EV and data center markets. Growth in EVs helps increase demand for high-voltage infrastructure, charging networks, and grid upgrades. Battery manufacturing and assembly plants need advanced electrical systems, which fuel demand for industrial power solutions. Since data centers demand high power and reliability, they also need a strong electrical infrastructure.
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Key Trends Likely to Shape the Electrical Equipment Industry
The regulatory framework for energy efficiency and the uptake of renewable energy is expected to intensify the market trend, opines Fortune Business Insights. The EV market is expected to be supported by the creation of a regulatory framework for energy-efficient motors possessing long life expectancies. Notably, electrical equipment happens to be the primary element fulfilling the criteria, including high-efficiency ratio, product purity, low energy costs, reliability, and sustainability for carbon emission-free vehicles. Fortune Business Insights believes that increased investment in EVs and advancements in battery technology are some of the global EV market trends. Significant momentum in battery technology continues to ramp up the EV market growth, and while global efforts remain focused on the improvement of range and reduction in charging times.
Furthermore, innovations including solid-state batteries and enhanced lithium-ion designs are witnessing traction, which can result in greater efficiency and reduced costs. Such advancements remain important for leading industry players, allowing them to meet increased consumer demand for reliable and long-range EVs. These demand trends are expected to significantly help the broader electrical equipment market in 2025. EV chargers need significant electrical hardware, including circuit breakers, transformers, control systems and power distribution units. Also, widespread EV adoption can pressurize the local electric grids, necessitating upgrades. This can benefit grid automation, smart grid technologies and load balancing.
Fortune Business Insights highlighted that hybrid and multi-cloud deployments continue to emerge as a critical market trend in the AI Data Center market. As and when AI models evolve, there is a need for varying computing, storage and networking requirements. Such favorable demand trends can help the broader electrical equipment market as AI centers require precise and reliable power distribution. This can help fuel growth in power monitoring and control systems, low and medium voltage electrical panels, among others.
Our Methodology
To list the 10 Best Electrical Equipment Stocks to Buy Now, we used a Finviz screener to shortlist the companies catering to the broader electrical equipment industry. After getting an extended list of 20-25 stocks, we chose the ones that are popular among hedge funds. Finally, the stocks were arranged in ascending order of their hedge fund sentiment, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A technician operating a power control module at a laboratory station.
Advanced Energy Industries, Inc. (NASDAQ:AEIS)
Number of Hedge Fund Holders: 18
Advanced Energy Industries, Inc. (NASDAQ:AEIS) is a renowned company in the electrical equipment industry, specializing in precision power conversion, control, and measurement solutions utilized in several industries. Analyst Duksan Jang of Bank of America Securities reiterated a “Buy” rating on the company’s stock, increasing its price objective to $118.00. The analyst’s rating is backed by a combination of factors, which include Advanced Energy Industries, Inc. (NASDAQ:AEIS)’s resilience to macroeconomic challenges as well as robust sales and earnings growth expectations. Its Q1 2025 sales surpassed expectations, while the outlook for the upcoming quarter is robust, thanks to the demand in the semiconductor and data center sectors.
Advanced Energy Industries, Inc. (NASDAQ:AEIS)’s revenue came in at $404.6 million in Q1 2025 as compared to $415.4 million in Q4 2024 and $327.5 million in Q1 2024. For Q2 2025, it expects revenue of $420 million (+/- $20 million). Advanced Energy Industries, Inc. (NASDAQ:AEIS) is expected to benefit from the roll-out of new product lines, which can improve margins and market share through 2026, says the analyst. Despite the worries, Jang believes that the company’s strategic positioning and operational efficiencies support the positive outlook. It is executing its gross margin improvement plan and continues to extend its market leadership with new products. Overall, the company remains well-placed to reap the benefits from expansion of electrical equipment market, mainly due to its leadership in semiconductor power solutions.
SouthernSun Asset Management, LLC, an investment management firm, released its Q4 2024 investor letter. Here is what the fund said:
“We initiated a position in Advanced Energy Industries, Inc. (NASDAQ:AEIS) during the quarter. AEIS designs and manufactures highly engineered power conversion, measurement and control solutions. The company’s power conversion products convert raw electricity from the utility grid into a precise, useable form of power for a given application. AEIS works in close collaboration with equipment manufacturers to design highly customized solutions, and approximately 70% of revenue comes from sole-sourced designs.
We began our research on this business, and this space more broadly, in 2021 and have learned a lot about the eco[1]systems that AEIS supports. You may recall that we were owners of CCMP in the post-COVID period before that business was acquired in 2022 by ENTG. Years before that, we were owners of Newport Corp, which was acquired by MKSI in 2016. Our time in and around the semi-conductor market, as well as decades of investing in industrial and medical markets, gave us a keen interest in learning more about AEIS, as we had come across the name but hadn’t done significant research. We have spent the past 2-3 years filling our files, as we have studied this business and it’s value chain more intensively…” (Click here to read the full text)
Overall, AEIS ranks 10th on our list of best electrical equipment stocks to buy now. While we acknowledge the potential of AEIS as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for a deeply undervalued AI stock that is more promising than AEIS but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
